Australian Federal Police to Investigate 2,000 Exploited Crypto Wallets

The Australian Federal Police has revealed that it is investigating the loss of at least 2,000 Australian-owned crypto wallets in crypto phishing scams.

Thousands of Australian-owned crypto wallets were found to be using “authentication phishing” methods following a Chinalysis investigation – Operation Spincaster.

“The information we collected collaboratively in Operation Spincaster shines a clear light on the new methods cybercriminals are using to defraud Australians,” AFP Detective Superintendent Tim Stainton said in a statement on August 4.

“It will be a key part of our ongoing investigation to identify victims of cybercrime and disrupt criminals in Australia.”

Operation Spincaster targets these authorized phishing scams through education, tools and training.

Phishing scams involve the fraudster tricking the user into signing a malicious transaction, which allows the fraudster to transfer the victim's tokens to a wallet address of their choice.

It is very common in fraudulent investment schemes that offer high returns or love scams, often called pork scams.

As of May 2021, victims have lost nearly $4 billion to authorized phishing scams.

Chainalysis is working with the AFP's Police Cyber ​​Crime Coordination Center (PCCC) to resolve ongoing investigations.

The collaboration comes after PCCC staff held a workshop with Chinalysis to dive deeper into Operation Spincaster and how they can best protect Australians.

“The workshop included sharing information about compromised wallets, training on tracking stolen funds, guidance on real-time detection of ongoing fraud attempts, and discussions on how to identify and support phishing victims.”

Cryptocurrency exchanges BTC Markets, Binance, Crypto.com, Ebonex, Independent Reserve, OKX, SwyftX and Wayex are working to protect Australians from these scams, Agence France reports.

Related: Chainalysis Tether Helps Control Secondary Market for Illegal Activity

Australian banks have taken matters into their own hands to combat cryptocurrency fraud over the past 12 to 14 months – moving bans or outright bans to cryptocurrency exchanges.

This includes the “Big Four” banks – Commonwealth Bank, National Australia Bank, Westpac, and Australia and New Zealand Banking Group – Bendigo Bank and more recently HSBC.

In the year Australians could lose up to $840 million to investment fraud by 2023, according to the country's competition and consumer watchdog.

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